MINNEAPOLIS and ALEXANDRIA, Va.—After posting sharp rises in 2019, prices in the global travel industry are likely to slow in 2020, with flights rising a 1.2 percent, hotels rising 1.3 percent, and rental car rates up 1 percent, according to the sixth annual Global Travel Forecast, published by CWT and the Global Business Travel Association (GBTA). While the global economy is doing well overall—and expected to grow a solid 3.6 percent in 2020—a raft of uncertainties are set to put a damper on global travel pricing.
“The risks and ambiguity have increased over the past few months—not least the threat of escalating trade wars, the impact of Brexit, possible oil supply shocks, and the growing likelihood of recession,” said Kurt Ekert, CWT’s president and CEO.
While the U.S. economy is thriving, there is growing uncertainty, due to tariffs and trade wars. U.S. GDP growth is set to slow to 2.1 percent in 2019, and slow further in 2020 and 2021, to 2 percent and 1.8 percent, respectively.
The hotel industry has seen slow, but steady, growth. Technology-focused areas—like San Francisco, San Jose, Seattle, and Vancouver—are still seeing rates increase. However, demand in these cities has been high for so long that prices have risen too far—and business travelers may be staying further out in response.
Flight prices are also expected to rise, reflecting the strong economies of the U.S. and Canada. In terms of ground transportation, due to the nature of long-term contracts, the U.S. is unlikely to see any upward trends in pricing until 2021 or 2022.
The 2020 Global Travel Forecast uses data generated by the B2B4E travel management platform CWT Solutions Group.